Re:THE APPLICATION OF EXXONMOBIL PRODUCTION COMPANY ) Disposal Injection Order No. 21
("ExxonMobil") for disposal of Class II oil field wastes by )
underground injection in the Alaska State A-2 well on ) Well Alaska State A-2
Flaxman Island. ) Flaxman Island
Reissued on
March 2, 2001

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on October 28, 2000.

3. The Commission did not receive a protest or a request for a public hearing.

FINDINGS:

1. ExxonMobil proposes drilling the Alaska State A-2 disposal injection well for the purpose of disposing of Class II oil field wastes that are currently stored on Flaxman Island in former reserve and flare pits.

2. The Alaska State A-2 well will be located on State of Alaska lease number ADL 47556, which is owned and operated by ExxonMobil. There are no other operators within a one-quarter mile radius of the proposed disposal injection well.

3. The Alaska State A-1 well is the only well within one-quarter mile of the proposed disposal well. The well was drilled, plugged and abandoned in 1975 and subsequently re-abandoned in 1998. The vertical well is located a distance of 300 feet east of the proposed Alaska State A-2 well.

4. ExxonMobil has provided an affidavit showing that they provided a copy of the application for disposal to the State of Alaska, Department of Natural Resources, the only surface owner within a one-quarter mile radius of the proposed disposal injection well.

5. ExxonMobil proposes to conduct disposal injection within the proposed Alaska State A-2 well in strata of the Sagavanirktok Formation, which is common to and correlates with the interval between 2,150 and 2,350 measured depth feet in the Alaska State A-1 well.

6. The base of the permafrost in the adjacent Alaska State A-1 well is at a depth of approximately 1,500 measured depth feet.

7. The proposed disposal zone in the Alaska State A-2 well is confined by over 120 feet of mudstone that lie above the disposal interval and below the base of the permafrost.

8. Based on analysis of the Alaska State A-1 well logs, the proposed injection intervals between the measured depths of 2,150 and 2,350 feet are friable sandstones and conglomerates which have average porosities of 28% and can reasonably be expected to have permeability ranging to one darcy.

9. ExxonMobil expects 20 feet of perforations between 2,330 and 2,350 feet in the Alaska State A-2 well will be sufficient for the proposed disposal project. If additional perforations are needed, they will be added above 2,330 feet. No perforations are planned above 2,150 feet.

10. A cement bond log will be run and cement records evaluated to ensure that the Alaska State A-2 well is cemented adequately to isolate the proposed disposal interval.

11. The well will be completed with 7 inch conductor set at 80 feet measured depth, and 5 inch surface casing set at 2,400 feet measured depth and cemented to surface in two stages. The first stage will extend from total depth to 900 feet, while the second stage will extend from the cementing collar at 900 feet to the surface.

12. The well will be equipped with 2-3/8 inch tubing string and packer set at approximately 2,000 feet.

13. ExxonMobil intends to utilize the Alaska State A-2 well to dispose of approximately 15,000 to 25,000 cubic yards of drilling wastes using grind and inject technology. These wastes accumulated in former reserve and flare pits while drilling the Alaska State A-1 and G-2 wells. Additional wastes created from drilling the Alaska State A-2 well will also be ground and injected in the same well. ExxonMobil estimates approximately 200,000 barrels of slurry will be injected.

14. The waste stream will consist of Flaxman Island reserve and flare pit wastes and waste drilling muds and cuttings from the Alaska State A-2 disposal well, commingled with additional water necessary to create an injectable slurry.

15. Using a portable grind and inject system, ExxonMobil estimates that the daily volume injected will be 250 to 400 cubic yards, or 1,200 to 1,900 barrels of waste material per day.

16. ExxonMobil estimates the surface injection pressure will not exceed 1,000 psi at an injection rate of 5 barrels per minute. Estimated average injection rates are 2.3 to 3.7 barrels per minute.

18. The modeled fracture length could possibly communicate with the nearby wellbore of the Alaska State A-1 well. Evaluation of cementing records indicate that the Alaska State A-1 casing strings were fully cemented during drilling and that all annuli were plugged from 231' to surface during subsequent abandonment in 1998

19. ExxonMobil will perform a step rate test to establish optimum injection rates and pressures. The step rate test will be incrementally increased to pump rates 100% in excess of the maximum anticipated injection rates for waste disposal. Pressure falloff data will be collected at the end of the step rate test.

21. There are no freshwater aquifers underlying the proposed project area. Based on well log analysis, the total dissolved solids concentrations in the proposed injection zone are estimated to be between 20,000 to 30,000 parts per million in the adjacent Alaska State A-1 well.

22. After completion of injection operations, ExxonMobil plans to plug and abandon Alaska State A-2 in accordance with 20 AAC 25.

CONCLUSIONS:

1. The application requirements of 20 AAC 25.252 have been met.

2. Those portions of aquifers underlying the Alaska State A-2 well are too naturally saline to be considered potential sources of drinking water.

3. Permeable strata, which are common to and correlate with the portion of the Sagavanirktok Formation between 2,150 and 2,500 measured depth feet in the Alaska State A-1 well, are likely to be present in the Alaska State A-2 well. These strata can reasonably be expected to contain the total volume of disposal fluids anticipated for this project.

4. Waste fluids will be contained within appropriate receiving intervals by confining lithologies, cement isolation of the wellbore and operating conditions.

5. Disposal injection operations in the Alaska State A-2 well will be conducted at rates and pressures below those estimated to fracture the confining zones.

6. Evaluation of operational performance data and reservoir surveillance data will aid in preventing fracturing of the confining zones.

7. Surveillance of disposal material placement, daily monitoring of operating parameters, and demonstration of mechanical integrity prior to injection will reasonably assure the waste fluids are contained within the disposal interval.
8. Disposal injection operations in the Alaska State A-2 well will not cause waste, jeopardize correlative rights, or impair ultimate recovery.

NOW, THEREFORE, IT IS ORDERED:

Rule 1 Authorized Injection Strata for Disposal

Class II oil field waste fluids may be injected in conformance with Alaska Administrative Code Title 20, Chapter 25, for disposal into Sagavanirktok Formation strata that are common to and correlate with the interval between 2,150 and 2,350 measured depth feet in the Alaska State A-1 well.

Rule 2 Authorized Fluids

This authorization is limited to Class II waste fluids as follows: excavated material from former reserve and flare pits on Flaxman Island and waste drilling muds and cuttings from the Alaska State A-2 disposal well commingled with necessary seawater to create an injectable slurry. The Commission may authorize the disposal of additional fluids not identified above on a case by case basis if the Commission determines they are suitable for disposal in a Class II well.

Rule 3 Demonstration of Tubing/Casing Annulus Mechanical Integrity

A schedule must be developed and coordinated with the Commission that ensures the tubing-casing annulus is pressure tested prior to initiating disposal, following well workovers affecting mechanical integrity and after an inactive period greater than 3 months. The casing must be tested at a surface pressure of 1500 psi or 0.25 psi/ft multiplied by the true vertical depth of the packer, whichever is greater. The test pressure must show a stabilizing trend and may not decline more than 10 percent within 30 minutes. The Commission must be notified at least twenty-four (24) hours in advance to enable a representative to witness pressure tests. The mechanical integrity of the tubing, packer and production casing in the Alaska State A-2 well must be demonstrated in accordance with 20 AAC 25.412 prior to commencing injection operations.

Prior to initiating disposal operations and after an inactive period greater than 3 months, a step rate injection test meeting the Commissions criteria must be conducted and a static temperature survey must be obtained.

During disposal, the following operating parameters must be monitored continuously and evaluated whenever there is a change that might suggest a changing injection environment:

1. Injection pressure at the wellhead
2. Annulus pressure(s)

During disposal, in addition to the two parameters noted above, the following information must be (a) recorded as continuously as practicable; (b) tabulated at least daily or more frequently if needed to convey the details of the disposal operations; and (c) evaluated whenever there is a change that might suggest a changing injection environment:

Within 60 days of the completion of injection operations, or annually by July 1, if the operation extends beyond one year, a report evaluating the performance of the disposal operation and summary of surveillance activity and results must be submitted by July 1.

Rule 6 Notification

Seven days prior to spud date, ExxonMobil will provide the name and phone number of the person(s) responsible for 1) drilling operations, 2) surveillance reporting to the Commission and 3) disposal operations.

The operator must immediately notify the Commission if it learns of any improper Class II injection. Additionally, notification requirements of any other State or Federal agency remain the operators' responsibility.

Rule 7 Administrative Action

Upon request, the Commission may administratively revise and reissue this order or any of its rules upon proper showing that the change is based on sound engineering practices, will not allow waste fluids to escape from the disposal zone, and will not cause waste.

Rule 8 Statewide Requirements

Except where a rule stated above substitutes for a statewide requirement, statewide requirements under 20 AAC 25 apply in addition to the above rules.